Benzinga | Nov 30, 2021 04:52PM EST

Elanco To Lay Off 20% Senior Management In Organizational Restructure

Elanco Animal Health Incorporated (NYSE:ELAN) will consolidate commercial operations for Elanco International and Elanco Europe into one organization under Ramiro Cabral, EVP & President Elanco International.

* The restructuring includes eliminating approximately 380 positions, including about 20% of Elanco's senior management.

* Elanco believes the move will help offset previously disclosed higher cost pressures and maintain its current path to 60% adjusted gross margin by 2023 and 31% adjusted EBITDA margin by 2024.

* Elanco expects to record a Q4 2021 pre-tax charge of $86 million - $94 million for severance costs.

* Reported Q4 net income is expected to reduce by $65 million - $71 million and EPS by approximately $0.13 to $0.15.

* The compensation and benefits savings in 2022 are anticipated to be approximately $60 million, and once fully implemented, are expected to provide annual savings of roughly $70 million.

* There is no change to the 2021 full-year guidance for revenue of $4.73 billion - $4.77 billion, adjusted EBITDA of $1.03 billion - $1.07 billion, and adjusted EPS of $0.97 - $1.03.

* Price Action: ELAN shares are down 1.62% at $29.70 on the last check Tuesday.